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UK shares rose on Monday with widespread gains after U.S. President Donald Trump temporarily exempted smartphones and computers from hefty Chinese tariffs. This move offered some relief to investors following weeks of market volatility. The blue-chip FTSE 100 index increased by 0.5% as the trading day neared its close. However, Trump indicated that these exemptions are temporary. His strategic plan aims to boost domestic semiconductor production, with specific tariffs expected within two months, separate from the existing 125% tariffs on Chinese imports. The ongoing uncertainty over tariff regulations has unsettled global markets, leading to a roughly 9% drop in the UK's blue-chip index from its peak. Gains were primarily driven by the energy sector in both indexes, as oil prices edged up, buoyed by the U.S. tariff exemptions and Chinese data showing a significant rise in March crude imports. On the policy front, Bank of England interest rate-setter Megan Greene stated on Saturday that the impact of the tariffs on UK inflation remains unclear, and the unpredictable behaviour of the dollar is complicating the situation for the British central bank.

Over the weekend, parliament voted to give the government control over British Steel by directing its board and workforce, stopping short of full nationalisation. The proposal raises questions about the impact on the deficit and funding, though the government claims no new borrowing will be needed, using existing budgets instead. However, reallocating funds can create internal political tensions. Additionally, the government suspended import tariffs on 89 products for two years to help businesses, costing an estimated £17 million. This move highlights the influence of global trade developments and challenges the relevance of the OBR Spring Statement forecast. Meghan Greene noted that tariffs could slow growth, impacting public finances and increasing risks to the government's financing needs.

Single Stock Stories & Broker Updates:

• Shares of Ashmore Group fell to an 18-year low, down 7.6% at 123.5p, with assets under management at $46.2 bln at the end of Q3, a drop from $48.8 bln in December 2024. The company noted heightened market volatility due to increased tariffs and shifts in global trade but indicated that institutional outflows did not suggest a broader trend. Year-to-date, the stock is down about 16.4%.
• Wood Group jumps 27.9% to 31.98p, set for third consecutive gain; Sidara plans to acquire at 35p/share with a $450M capital injection. YTD, WG down ~62%.
• Shares of Energean rise 2.9% to 803p after signing a GSPA with Kesem Energy, worth over $2 billion. The Israeli unit will supply 12.5 billion cubic meters of gas to Kesem's power plant over 17 years. However, the stock has fallen 27.24% year-to-date.
• Distil rises 21.4% to 0.085p as it partners with AIKOImporters to reintroduce Blavod Black Vodka in the U.S. It anticipates manageable U.S. tariff levels, with potential future tariff lifts benefiting the supply chain. DISD is down ~44% this year.
• Kainos Group shares rise 10.49% to 710p, the top gainer on London's mid-cap index, marking its highest intraday gain since May 17, 2024. The IT software developer anticipates FY25 revenues and adjusted PBT in line with forecasts following a solid Q4. Analyst Peter McNally notes a turnaround in the UK government-exposed Digital Services division, and the forthcoming Spending Review in June may lead to contract awards. However, Kainos is still down ~20% this year.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8950

• Primary support 7500
• Below 7400 opens 6850
• Primary objective 9050
• Daily VWAP Bullish
• Weekly VWAP Bearish

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